Shri Narendra C. Akbari, Kalawad- Shitla V. The Income Tax Officer, Ward-3(2), JAMNAGAR

ITA 74/RJT/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1310 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M J CHARANIA
• Assessee Lawyers: DM RINDANI
• Keywords: Additional evidence
• Section: 40A(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BEN CH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S. S. GOD ARA, J.M.) ( , .. , ) ITA NO. 74/RJT/2015 (ASSESSMENT YEAR: 2008-09) SHRI NARENDRA CHANABHAI AKBARI PROP. OF M/S JAY TRACTOR & AGRO AGENCY, GAYATRI COMPLEX, OPP. GOVT. HOSPITAL, KALAVAD VS. THE INCOME-TAX OFFICER, WARD-3(2), 4 TH FLOOR, MANEK CENTRE, P. N. MARG, JAMNAGAR PAN: AHNPA8658E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D. M. RINDANI, A.R. RESPONDENT BY : SHRI M. J. CHARANIA, D.R. DATE OF HEARING : 04 -04-20 16 DATE OF PRONOUNCEMENT : 25-04-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A), JAMNAGAR, DATED 25.02.2015 FOR A.Y. 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINES S OF TRADING IN FERTILIZERS, GENERAL MERCHANDISE AND TRADING OF OTHANI AND TRACT OR IN HIS PROPRIETARY-FIRM BY THE NAME OF M/S. JAY TRACTOR & AGRO AGENCY. ASSESS EE FILED HIS RETURN OF ITA NO.74/RJT/2015 (A.Y. 2008-09) (SHRI NARENDRA C AKBARI VS. ITO) 2 INCOME FOR A.Y. 2008-09 ON 28.03.2014 DECLARING TOT AL INCOME OF RS.90,798/-. INITIALLY THE RETURN OF INCOME WAS PROCESSED U/S.14 3(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS REOPENED AND NOTICE U/S.148 OF THE ACT WAS ISSUED ON 22.03.2013 ASKING THE ASSESSEE TO FILE THE RETURN OF INCOME AN D IN RESPONSE TO WHICH, ASSESSEE SUBMITTED THAT THE RETURN THAT WAS FILED ON 23.09.2 008 BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S.148 OF THE ACT. SUBSEQUENTL Y, THE ASSESSMENT WAS FRAMED ON 28.03.2014 U/S.143(3) RWS 147 OF THE ACT AND THE TOTAL INCOME WAS DETERMINED AT RS.43,82,290/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 25.02.20 15 (IN APPEAL NO. CIT(A)/JAM/106/14-15) DISMISSED THE APPEAL OF ASSES SEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING EFFECTIVE GROUND: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )- JAMNAGAR ERRED IN CONFIRMING THE DISALLOWANCE OF RS.42,36,500/- MADE BY THE ASSESSING OFFICER U/S40A(3) OF THE ACT. 4. ON VERIFICATION OF THE LEDGER ACCOUNTS OF M/S. P . M. DIESELS, A.O. NOTICED THAT ASSESSEE HAD MADE CASH PAYMENT OF RS.42,36,500 /-. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE AFORESAID AMOUNT NOT BE DISALLOWED U/S.40A(3) OF THE ACT. THE SUBMISSIONS OF THE ASSESSEE INTER ALIA OF THERE BEING NO BANKING FACILITY, THE FARMERS NOT HAVING THEIR BANK ACCOUNTS, WAS NOT FOUND ACCEPTABLE TO THE A.O. HE CONSIDERED THE CASH PAYMENTS OF RS.42,36,500/- MADE TO M/S. P. M. DIESELS BY THE ASSESSEE AS BEING VIOLATION OF THE PROVISIO NS OF SECTION 40A(3) OF THE ACT AND, ACCORDINGLY, DISALLOWED THE EXPENDITURE. 5. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF A.O. BY HOLDING AS UNDER: 6. I HAVE DULY CONSIDERED THE SUBMISSION OF THE AP PELLANT AND ALSO GONE THROUGH THE DISCUSSION MADE BY THE AO IN ASSESSMENT ORDER. ITA NO.74/RJT/2015 (A.Y. 2008-09) (SHRI NARENDRA C AKBARI VS. ITO) 3 6.1 I AM OF THE VIEW THAT THE AO HAS RIGHTLY DISALL OWED THE PAYMENT IN CASH BY INVOKING PROVISIONS OF SECTION 40A(3) DUE TO FOLLOW ING REASONS:- (1) THE PLACE OF BUSINESS IS LOCATED WHERE BANKING FACILITIES ARE VERY MUCH AVAILABLE AND THE APPELLANT HIMSELF HAS PAID A NUMB ER OF TIMES FOR THE CONCERNED PURCHASES BY CHEQUE/DEMAND DRAFT. (2) THE PROVISIONS OF THIS SECTION HAS NO RELATION WITH ANY SPECIFIC CLASS OF PERSONS OR LOCATION OF THE BUSINESS OR GENUINENESS OF THE T RANSACTIONS. (3) THE PROVISIONS OF THIS SECTION SIMPLY BAR THE A SSESSEE FROM MAKING PAYMENT TOWARDS EXPENDITURE OTHERWISE THAN BY CROSSED A/C. PAYEE CHEQUE. (4) THE A.O. HAS NOT BEEN GIVEN ANY DISCRETIONARY P OWER IN THIS MATTER. 5) THE APPELLANT'S CASE DOES NOT FALL IN ANY OF TH E EXEMPTED CATEGORIES MENTIONED IN RULE 6DD. NONE OF THE CASE LAWS QUOTED BY THE APPELLANT IS HE LPFUL TO THE APPELLANT BECAUSE THE FACTS OF THIS CASE ARE DIFFERENT FROM THE CASE LAWS QUOTED BY THE APPELLANT. ACCORDINGLY THE DISALLOWANCE MADE BY THE A.O. U/S.4 0A(3) IS HEREBY CONFIRMED AND THE GROUNDS OF APPEAL ARE DISMISSED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE I S NOW IN APPEAL BEFORE US. 7. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS M ADE BEFORE THE A.O. AND LD. CIT(A) AND FURTHER SUBMITTED THAT BEFORE LD. CIT(A) A REQUEST WAS MADE BY THE ASSESSEE TO ENTERTAIN ADDITIONAL EVIDENCE IN FORM O F CONFIRMATION OF M/S. P. M. DIESELS, WHEREIN IT WAS STATED THAT M/S.P.M. DIESEL S HAD INSISTED THAT THE ASSESSEE MAKE PAYMENTS IN CASH. HE POINTED TO THE AFORESAID COPY OF THE LETTER FILED BEFORE LD. CIT(A) WHICH WAS PLACED AT PAGE NOS. 10 TO 12 O F THE PAPER BOOK. HE SUBMITTED THAT THE ADDITIONAL EVIDENCE WAS NOT ACCE PTED BY LD. CIT(A). LD. A.R. THEREFORE, SUBMITTED THAT THE MATTER MAY BE RE MITTED BACK TO THE FILE OF LD. CIT(A) WITH DIRECTION TO CONSIDER THE ADDITIONAL EV IDENCE FURNISHED BY THE ASSESSEE AND THEREAFTER DECIDE THE MATTER. HE FURT HER SUBMITTED THAT ASSESSEE WOULD CO-OPERATE BY FURNISHING ALL THE REQUIRED DET AILS CALLED FOR BY THE ITA NO.74/RJT/2015 (A.Y. 2008-09) (SHRI NARENDRA C AKBARI VS. ITO) 4 AUTHORITIES. LD. D.R., ON THE OTHER HAND, SUPPORTE D THE ORDERS OF ASSESSING OFFICER AND LD. CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DI SALLOWANCE OF EXPENDITURE U/S.40A(3) OF THE ACT. BEFORE US, IT IS ASSESSEES SUBMISSION THAT IT HAD FILED ADDITIONAL EVIDENCE IN SUPPORT OF ITS CLAIM AND THO UGH THE ADDITIONAL EVIDENCE GOES TO THE ROOT OF THE MATTER BUT THE ADDITIONAL EVIDENCES WERE NOT ACCEPTED BY THE LD. CIT(A). BEFORE US, ON BEHALF OF ASSESSEE A N APPLICATION HAS BEEN MADE FOR ADMISSION OF ADDITIONAL EVIDENCE AND IT IS SUBM ITTED THAT THESE EVIDENCES WOULD BE MATERIAL AND WOULD HELP IN DECIDING THE IS SUE. CONSIDERING THE FACT THAT THE ADDITIONAL EVIDENCES WOULD HELP IN DECIDING THE ISSUE THE SAME ARE ADMITTED, BUT SINCE THESE EVIDENCES WERE NOT CONSIDERED BY T HE LD.CIT(A), WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE ISSUE RAI SED IN THE APPEAL NEEDS TO BE CONSIDERED AFRESH IN THE LIGHT OF ADDITIONAL EVIDEN CES SUBMITTED BY THE ASSESSEE. WE THEREFORE REMIT THE ISSUE TO THE FILE OF LD. CIT (A) TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT LD. CIT(A) SHALL GRANT ADEQ UATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. WE FURTHER DIRECT THE ASSESSEE T O CO-OPERATE BY FURNISHING PROMPTLY ALL THE DETAILS CALLED FOR BY THE AUTHORIT IES. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 25/04 /2016 SD/- SD /- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED. 25/04/2016 ITA NO.74/RJT/2015 (A.Y. 2008-09) (SHRI NARENDRA C AKBARI VS. ITO) 5 S K SINHA COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT 1.DATE OF DICTATION 04.04.2016 & ADDITIONAL EVIDENC E FORMAT 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E OTHER MEMBER 11-04-2016 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER